Relevant:
- FHA bailout inches closer -- FHA defaults surge 26 percent while upping mortgage insurance premiums to make loans more expensive. Foreclosure starts outnumber foreclosure sales 3 to 1.
- Housing Bust 2? Subprime No-Down-Payment Mortgages Surge, "Shadow Banks" Dominate (+GOVERNMENT PICKS UP TAB)
- The OUTRAGEOUS story behind H.R. 600… Why Democrats are Supporting a Bill that Allows People to Get FHA-Insured Mortgages Without Down Payments
- FHA Preps Tax Credit for Down Payment Use
- House shoppers find FHA loans cost more
2009-03-19 — nationalmortgagenews.com
The FHA is experiencing "a large number of zero payment defaults" in which borrowers fail to make even one payment on their new government-insured mortgages, a Department of Housing and Urban Development official said at the Mortgage Bankers Association's annual National Fraud Issues Conference in Las Vegas. The trend, which Lisa Gore, the assistant special agent in charge of the criminal investigation division in HUD's inspector general's office, called "a huge red flag" that some type of fraud has been committed, is similar to the one experienced in the 1999-2001 housing market turndown... [The Washington Post's] analysis of FHA data found that more than 9,200 loans insured by the agency in the past two years have gone delinquent with either one payment or no payments being made. The analysis found that the pace of what the Post called "instant defaults" has tripled in the last year, and more than two dozen loans are defaulting in this manner every week, the newspaper reported...
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